Loan Sale Premiums Level off in October

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The BoeFly Loan Sale Index (SBA) is the leading measure of secondary market sale prices of SBA-guaranteed loans. BoeFly, as the only marketplace connecting lenders with business borrowers and secondary market buyers, is uniquely positioned to provide this important pricing index for market followers.

SBA loan sale prices are an important barometer of the health of small business lending. When investors pay high prices, lenders are incented to originate new loans and inversely, as prices drop, lenders are signaled to slow origination.

The BoeFly Loan Sale Index (SBA) measures actual loan sale data from hundreds of banks - of all sizes and geographies - as they transact with buyers in the market.

In October, premiums retreated from the record highs set the previous month on both short and long-term loans. The BoeFly Loan Sale Index for 25-year Prime+2% went down 20 basis points to 111.1%. For 10-year Prime+2% loans, the Index declined by 30 basis points to 108.4%. Despite the drop, premiums remain near all-time highs, still at or above levels seen in August.

Below is recent price and trend information on SBA loan sale premiums as reported by BoeFly. The BoeFly Index tracks actual bids received on loans presented for sale through BoeFly. The BoeFly Index shows what a Prime + 2 loan of the given term that had just been funded would sell for in each month. The BoeFly Index robustly captures month-to-month pricing trends, while also controlling for factors including the age of the loan at the time of sale.

About the BoeFly Loan Sale Index (SBA):
The BoeFly Loan Sale Index (SBA) measures premiums paid on secondary market loan sales on a monthly basis. Based on aggregated transaction data from BoeFly, the only marketplace where lenders can connect with business borrowers and secondary market buyers, the Index provides an estimate of the premium a newly issued, 10 or 25 year Prime + 2% loan would fetch. The Index represents aggregated data from actual loan sales by banks. Members of BoeFly have access to full transaction detail on all loans presented for sale. With only slight changes in loan structure driving premiums, lenders rely on BoeFly loan sale data to optimally structure deals in light of what the market is currently valuing. BoeFly is the only service to provide actual bid levels based on loans presented for sale on BoeFly.